Fixed Recoverable Costs in Clinical Negligence claims: what we know and what it means for firms
Earlier this year, it was announced that the proposed Lower Damages Clinical Negligence Fixed Recoverable Cost (LDFRC) scheme that was due to come into play in April, would be further delayed – due to complexities surrounding its implementation. The scheme, which introduces a system of fixed recoverable costs in claims valued between £1,001 and £25,000, states its aim of making associated legal costs “more proportionate and predictable” and “facilitate quicker resolution so harmed people get compensation more quickly”. Here’s what we know about the scheme so far.
The proposals
Following numerous consultations, the proposed scheme will place a series of limits on how much lawyers can receive from lower damages clinical negligence claims (those valued between £1,001 and £25,000. The proposals state that this will save an estimated £500 million over the next decade, which the health service could direct to the care of patients.
It is also proposed that the majority of disbursements are included in the fixed recoverable costs.
The scheme was meant to come into play in April and has since been delayed with no firm date of when it will be reintroduced. With a new government in place, there is always the chance that these reforms could be delayed beyond the end of this year – but there’s complete lack of clarity around timescales, which is causing uncertainty for firms pursuing existing claims.
What this means for firms
Whilst the new scheme will give clarity for firms around applicable fees for relevant cases, there’s no doubt that this news will be most unwelcome to a number of firms. And for cases where the prescribed fees don’t make the required work a viable option for firms, claimants may find it a struggle to get representation.
Where cases are taken on, it is likely that restrictions on fees will leave less time for significant investigation – a part of the process which is important in identifying issues for practitioners and resolving existing issues for future patients.
As a result of the above, we also may see a rise in class action claims – although this would only be applicable in specific circumstances.
ATE insurance
One of the main findings of the latest consultation on the proposals surrounded the importance of ATE insurance, after submissions to the consultation highlighted the importance of ATE insurance policies in the current system, and how it enables claimants to access justice.
As a result, the most recent consultation response stated:
“After considering the responses, our proposed way forward is that recoverability of disbursements for… ATE premiums should be permitted for all claims under the LDFRC scheme, as proposed.”
The Government has suggested that it will go ahead with other forms of disbursements, such as court fees, being included within the limits imposed by the scheme.
For firms who are apprehensive about what lies ahead and how that will affect existing cases, ensuring clients have an appropriate ATE policy in place is a good protection in the first instance. Prosperity Insurance is suitable to firms of all sizes thanks to:
- Minimum volume commitment
- Fully delegated authority scheme
- Minimal reporting requirements
- Competitive premiums.
If you’d like to speak to our team to find out how we can support you and your clients with an appropriate policy, get in touch with our ATE expert, Mark at Mark.Rayner@prosperityinsurance.co.uk.
